Facing Up to the Future: Navigating Disruption, Building Trust

The BWI at 80 report is out.

Dear all,

This is just a quick dispatch to let you know that the report on the future of the World Bank and IMF that some of you are aware of that I have been working on, with Sri Mulyani Indrawati, until recently Indonesian finance minister, and Patrick Achi, a former prime minister of Côte d’Ivoire, has just come out. Titled Facing Up to the Future: Navigating Disruption, Building Trust, the report is accessible here. We briefed both their boards earlier this week.

Here too is an article by me online in The Observer today which picks up our central point: in an era of collapsing Aid (ODA) and geopolitical competition and fragmentation, borrowing countries need to step up and take charge of their own development destinies. Don’t count on the old donors or the old ways.

We were asked by the chief executives of the two institutions to undertake this report just over a year ago as the IMF and the World Bank Group (the BWIs) reached 80. The year since has been a long one in the development sector. Long-term trends such as climate change and inequality continue to worsen and the grant resources to address them are more constrained. And new threats from tariffs to AI and crypto have roiled the global economy.

The psalm predicts that only the strong make it to fourscore years - the authors didn’t think of warning that the 81st year can be a rough one. Ajay Banga at the World Bank and Kristalina Georgieva at the IMF have handled the broncho-ride of Trump’s return to the White House with some aplomb, continuing to make significant operational improvements in their institutions while navigating the treacherous politics of Washington. The Bank, for example, is continuing to put a lot more staff in the field and the IMF to strengthen its surveillance.

But as we argue, it is time for a shift of cultural ownership in the institutions from donors to borrowers. When Washington politics governs what you can or cannot say about development mainstays like climate or gender it is time to upsticks and head for the field!

Relying on borrowing from the markets rather than solely grant funds the BWIs assume a bigger not smaller role in the new landscape. But a landscape where aid will have fallen by a third over a several year period and new donors, public and private lenders and investors, have entered the space, which means a new political and policy context.

The moment has arrived for a new development sovereignty, when borrowing countries themselves get to make the choices about their development strategies. The slashing of development assistance (ODA) in the institutions’ 81st year, by the US and Europeans alike, has set the stage for possibly as dramatic a shift in the institutions’ character and ownership, as the four score years that preceded.

I am eager to hear any reactions, once you have a chance to take a look.

Best,
Mark